Honduras » Outlook

International Property Brokers assume broad policy stability in 2007-08, concentrating on goals approved under an IMF-World Bank poverty reduction and growth facility (PRGF). Honduras will benefit from debt relief under the heavily indebted poor countries (HIPC) initiative during 2007-08.

Annual GDP growth will average 4.8% in 2007-08. Better monetary policy tools will allow the Banco Central de Honduras (BCH, the Central Bank) to keep inflation below trend, in the absence of external shocks, such as oil prices rising above current forecasts. The exchange rate will continue progressively to rise in value in real terms against the US dollar. Certain growth in the import bill, related with relatively high oil prices and firm domestic demand, will result in a extend trade deficit, but this will be partly equalize by rising remittances.

Manuel Zelaya Rosales of the Partido Liberal (PL) is just over one year into his four-year term as president. The PL's be short of a simple majority in Congress leaves the government dependent on the support of other parties to pass legislation.